Legal Briefing

Digital Economy Act 2010: who should be worried?

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Technology, Media and Telecoms | 01 June 2010

Depending on which newspaper you read, the Digital Economy Act 2010 (the 2010 Act), which became law on 8 April 2010 after a speedy parliamentary ‘wash-up’ procedure, is either going to kill or cure the digital ills of the nation. Certain quarters of the press would have us believe that it is only a matter of time before threatening letters drop through the doors of millions of pensioners, accusing them of illegally downloading hardcore pornography. These poor souls will have their internet cut off within seconds by demonic record or film executives, cackling maniacally as they do so. This, of course, is fantasy. At the time of writing, nobody, not even Ofcom, has a large red button with which to turn off internet connections at will.

What is striking, but less widely reported, is that the 2010 Act potentially affects the majority of businesses in the UK, not simply the traditional copyright owners, internet service providers (ISPs) and infringing individuals that might be expected.

Key Provisions

The 2010 Act deals with a range of digital issues from domain names, regional news services and video game classification to the public service remit of Channel 4. Most are uncontroversial. However, the headline provisions of the 2010 Act have become something of a political football. They relate to the thorny issue of illegal downloading of copyright material from the internet.

For many years, it has been heard how internet piracy is dogging, in particular, the music and film industries whose works are being illegally shared via, most commonly, peer-to-peer networks (P2P). A sizeable proportion of the culprits are individuals who share material by downloading or uploading and utilising P2P websites, as well as those who run the P2P websites. The 2010 Act was seen by many in the creative industries most affected to be the mechanism to help put an end to such abuse. However the following three key questions have arisen:

  • Will it work?
  • Will copyright owners use it?
  • Is it more effective than remedies already available?

Feasible?

The 2010 Act outlines the following new procedure:

  • Copyright owners may send a copyright infringement report to an ISP after apparent copyright abuse and within one month of an alleged incident. This abuse may either be infringement by a subscriber or by a person who a subscriber allows to use their service. The report must provide a description of the alleged incident, including evidence and internet protocol (IP) address details, ie the connection information that identifies who the subscriber is. The ISP must then notify the subscriber within a month, providing evidence and information about legal advice and appeals.
  • Copyright owners may request a copyright infringement list that the ISPs must provide and that outlines which of the reports refer to an individual subscriber in a given period. The list is anonymised.

Copyright holders can then apply to court for a Norwich Pharmacal order, essentially an order forcing the ISP to identify the subscriber so they may then pursue them for copyright infringement.1 This is not a new device and ISPs rarely challenge such applications.

Failure to carry out the above may result in a fine of up to £250,000, enforced by Ofcom. The Secretary of State may also direct Ofcom to assess whether technical obligations should be placed on ISPs (following consultation and parliamentary approval). These obligations are measures that:

  • limit the speed or other capacity of the service;
  • prevent a subscriber from using the service to gain access to particular material;
  • suspend the service; or
  • limit the service in another way.

These measures have been accused of being at best draconian and at worst an infringement on a subscriber’s human rights, specifically their right to privacy and right to freedom of expression. A fine of up to £250,000 may be applied to ISPs who fail to carry out technical measures.

The 2010 Act also provides for the implementation of regulations (following consultation and parliamentary approval) allowing courts to grant a blocking injunction in respect of a location on the internet where a substantial amount of material has been infringed. The vague ‘location on the internet’ has already attracted criticism.

Critically, however, the entire discussion remains moot until an Initial Obligations Code is introduced to be drafted or approved by Ofcom. The Code must deal with when copyright owners may use the above procedure, setting a threshold for when they may request a copyright infringement list. It is expected that this will be a ‘three strikes’ system. The Code must also contain various provisions concerning evidential requirements costs, information storage, enforcement and sanctions. It would be for Ofcom to arbitrate disputes between ISPs and copyright owners while a first-tier tribunal would be set up to deal with subscriber appeals.

Subscribers may appeal successfully if they can show that either they did not commit the act or that they took reasonable steps to stop others doing so via their service.

As to whether the above procedure is feasible: it is far too early to tell. The Code is not yet drafted and no consultations have taken place. The process is likely to be bitterly fought, lengthy and face political hurdles. The Liberal Democrats have stated their desire to repeal sections of the 2010 Act. The Conservatives have previously indicated a desire to alter the remit of Ofcom. It remains to be seen whether the coalition government will have the intent to see these provisions bear fruit.

Furthermore, the technical measures can only be implemented at least a year after the Code has been introduced, and must be consulted on and laid before Parliament. Ofcom must also introduce a separate Technical Obligations Code to regulate their use.

Will it be used?

Assuming the above hurdles are overcome and the procedure can be used, the next question is will it be used, or rather, should it be used?

It is true that there is likely to be a rush by copyright holders to use the procedure once the Code is in place and, if so, infringers have reason to be concerned. However, those considering using the procedure would be wise to look before they leap. Long before the 2010 Act, copyright owners pursued individual infringers through large-scale letter writing exercises. Many of these copyright owners have subsequently found themselves fighting a losing PR battle against newspapers willing to take up the fight or give people a platform to air their views.

While it may appeal to copyright holders at first blush to pursue the individuals, they must weigh up the benefits against the potential reputational damage. Reputational damage can come from a variety of sources, from the mainstream press to irate and determined bloggers. Pursuing a campaign against infringers without considering how to deal with potential criticism is ill-advised, and can do more harm than good to a company’s brand both locally and internationally. Pre-emptive press strategies to deal with such eventualities can be put in place, defamatory material can be removed from websites, and blogs can be traced and shut down, but the key is to be in a position to weigh that effort and cost against the financial rewards of pursuing infringers. Forewarned is forearmed.

Is it an improvement?

Much remains to be seen as to how feasible the procedure and sanctions are. However, assuming its teething difficulties are overcome, the 2010 Act does offer some useful remedies. People could be forgiven for thinking, in light of the furore surrounding it, that this is the first time copyright holders have been able to protect their work. It is not, this new procedure merely complements the remedies already available.

When faced with copyright infringement on a website, the traditional route has been to request that the offending material is taken down and/or apply for injunctive relief and damages further to the Copyright, Designs and Patents Act 1988. Injunctions against ISPs are also possible if they have actual knowledge of the infringement. The problems start when trying to injunct P2P sites that don’t actually contain the infringing material, but rather facilitate the sharing of it. The 2010 Act is designed to plug this gap by blocking online locations. However, as noted, this is yet to be consulted on.

In addition, what the 2010 Act does, which the traditional route does not, is put people on notice that if they continue to download they may be prosecuted. Such would not be feasible in terms of costs using the traditional route.

But the traditional route still has its advantages, not least where there is a mixed purpose to the material or where it is simply hosted online. Take, for example, the scenario where someone posts private footage of a celebrity onto a video-hosting or sharing website. Under the 2010 Act, a report request to the ISP could be made and then a list requested, but these take time. The main objective is the removal of the material immediately and the 2010 Act does not assist. The traditional route offers that immediacy through an injunction for copyright infringement and breach of privacy against the website. People can then quickly apply for a Norwich Pharmacalorder that the ISP identify the person who had uploaded the information. This could all be done out-of-hours or at the weekend. It would be assumed that ISPs are not available to produce copyright infringement lists at such times.

Information would not have to be private. Take another scenario, for example a similar website persistently ignoring written requests to remove certain uploaded content or block a particular user. The threat of an injunction and the associated costs concerns may well be sufficient to prompt them into action. Threatening a request for an infringement list is not likely to have the same effect.

Conclusion

Much will depend on the terms of the Initial Obligations Code, if, and when, it is agreed. Until it is finalised, effective remedies are available to combat certain infringements. In the interim, individuals would do well to ensure their connections are secure, wi-fi providers should consider taking advice on the matter and employers who provide internet access should consider how best they might avoid the nightmare scenario of turning up to work one day only to find their internet connection cut off.

As a final thought, it is perhaps interesting to note that recent research into the effectiveness of similar three-strike legislation in France found that, in the three months after legislation was passed, although admittedly prior to implementation, piracy actually rose by around 3%, with people moving away from P2P sites and towards other illegal sharing methods not captured by the legislation. One news report compared it to a game of Whack-a-Mole.